Cannabis Officials Consider New Hospitality Rules

"I want to watch the Super Bowl and get high. That's not weird."

While Truman Bradley has no fantasy of the Denver Broncos making the Super Bowl this year, he still would like to watch the big game with other cannabis consumers. As it stands in Colorado, however, his options are limited.

Despite being the first state to legalize the plant for recreational use in late 2012, Colorado still hasn't effectively established a licensed hospitality sector for cannabis. Social consumption licenses for businesses interested in allowing cannabis use weren't created at the state level until 2019, and there are fewer than ten mobile lounges and other establishments now operating with hospitality licenses across the state.

Bradley, the executive director of the Marijuana Industry Group, and other cannabis industry stakeholders attended a meeting called by the Colorado Marijuana Enforcement Division (MED) on Monday, September 18, to discuss a slew of updates to the state's cannabis business rules. Among the proposed changes were a handful of new regulations intended to loosen regulations surrounding cannabis hospitality, including an increase to the maximum amount of cannabis products that hospitality businesses can sell and giving customers the ability to leave hospitality businesses with leftover cannabis.

Cannabis hospitality businesses currently fall into two tiers in Colorado: lounges operating under a bring-your-own model and establishments allowing sales. That second category works similar to a bar, with visitors ages 21 and up allowed to buy up to two grams of cannabis flower, 0.5 grams of hash, or an edible with ten milligrams of THC, with all product required to be consumed or thrown away on site before the customer leaves.

The MED is suggesting that hospitality businesses be allowed to sell up to one ounce of flower, eight grams of concentrates or edibles containing 100 milligrams of THC, amounts similar to Colorado's daily sales limits at recreational dispensaries. Under the proposed rules, hospitality businesses could also sell cannabis products through vending machines and would have to "ensure" that stoned visitors had access to safe transportation before leaving.

The proposals were supported by several cannabis industry members and their representatives, including VS Strategies and JAD's Mile High Smoke, the state's only permitted cannabis bar that's actually open.

JAD's owner Joshua Davis regularly holds day-long watch parties for sporting events. He told MED officials that selling more cannabis to customers would help his business, which is located in unincorporated Adams County, and would provide a service to visitors who hang out at the venue throughout the day.

"People come and they will literally spend ten hours at my facility and enjoy the product," he said during the meeting. "They spend time there. They leave when they feel it is safe for them to leave, not because we're kicking them out or anything. The way things actually play out and the way people have things in their heads are not the same."

Colorado currently allows bars and restaurants to serve to-go orders of alcohol, VS Strategies partner Jordan Wellington pointed out to MED officials. According to Wellington, who also pushed for increasing the sales limits, not allowing visitors at places like JAD's to take home products incentivizes people to consume more in order "to avoid being forced to throw products out."

Organizations created to keep cannabis products out of children's hands objected to the idea of raising sales limits to an ounce, however, and so did several members of the cannabis industry who were more concerned about other restrictions on the hospitality sector. Adam Foster, chief legal officer for dispensary chain Silver Stem Fine Cannabis, argued that local governments should shoulder more of the blame for a lack of licensed cannabis hospitality options.

Under the state's cannabis hospitality law adopted in 2019, local governments must approve cannabis hospitality before such businesses can operate within their jurisdictions. To date, Denver and Adams County are the only local governments to have opted in and permitted businesses to open, while city councils in Aurora and Boulder rejected the idea after much consideration.

In Denver, however, the majority of cannabis events take place at unlicensed venues, with just one lounge and three pot-friendly tour services operating under the local hospitality rules. Denver's licensing department has recently cracked down on unlicensed cannabis events, arguing that they aren't legal under state and city laws — but several business owners trying to obtain local hospitality licenses have complained about Denver's restrictive ventilation, building plan and location requirements.

Foster said he's on board with allowing "a little to take back" for customers, but believes a one-ounce sales limit would create the "functional equivalent to a store."

"If we need to lower barriers entries like other folks have set — setbacks and ventilation requirements — those are all good solutions. The solution is not to turn it into a store or raise the [hospitality sales] limits for flower by fourteen times," he said. "I think that would give them an unfair advantage."

The MED also proposed new rules that would create a lane for cannabis-friendly spas. While the current hospitality regulations require video surveillance in consumption areas and cut off infused-product sales at ten milligrams of THC, the department is considering making exceptions to both rules for permitted cannabis spas with licensed massage therapists. The issue was raised by Rebecca Marroquin, who has applied to open Pure Elevations Spa, a pot-friendly spa, lounge and micro-dispensary in south Denver.

Marroquin also said she opposed the idea of raising sales limits to an ounce of flower or eight grams of concentrate, but did support increasing the limit on a lesser scale.

"I don't feel like [dispensaries] should compete with us, and I don't feel like we should compete with them. Marijuana sometimes takes a little time to actually hit mentally. I'm happier with a lot less than what the recommendation says," she added.

Blue Rising and One Chance to Grow Up, two groups that lobby in the name of restricting youth cannabis access, argued that raising cannabis sales limits at hospitality establishments should be done by the Colorado Legislature or in a more public fashion, but MED leadership pushed back on their claims that the conversation has not been accessible. Still, the MED admitted that allowing vending machines to sell and dispense cannabis products could require a statutory rule change by lawmakers.

The MED will hold three more rulemaking meetings and is accepting written comments from the public before submitting a final draft of regulations on October 30, with the new rules taking effect on January 8, 2024.